Unformatted text preview: If you are working in an environment of economies of scale where you wanna minimize cost of production the speed becomes crucial. The faster you produce the more efficient you’re using you”re available sources. Integrated production processes Specialized supply chains Economies of scale - produce for a lesser cost “Interchangeable” labor Interchangeable” Emphasis on “generalist” management Economies of scale High speed of production High investment Economies of scale Interchangeable parts Specialized machines Economies of Scale Economies
Reduction in cost per unit resulting from increased production, realized Reduction through operational efficiencies. Economies of scale can be accomplished because as production increases, the cost of producing each additional unit falls. each Short term economies of scale are the result of spreading fixed costs Short across all throughput; across Intermediate term economies of scale are the result of having longer Intermediate production runs; production Long term economies or scale are the result of physics, which dictate Long that unit cost as a function of capacity is equal to a function aC^(b-1), where b lies...
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This note was uploaded on 03/08/2009 for the course AEM 1200 taught by Professor Perez,p.d. during the Spring '06 term at Cornell.
- Spring '06